Merger Costs See Paddy Power Betfair Slump to a Loss | PokerNews
Gambling giant Paddy Power Betfair announced a £47.5 million loss within the first-half of 2016 causing shares within the company to fall 2.6 percent to £96.90 per share.
The company made a profit of £106.5 million a year earlier, however the cost of the merger between Paddy Power and Betfair weighed in at £195.1 million, of which £29 million was related to advisory fees.
Although Paddy Power Betfair recorded a loss, the remainder of its financial figures were positive, and the corporate is in excellent health.
Its sportsbook stakes increased 21 percent, total net revenue increased by 18 percent to £759 million, gross profit soared by 19 percent to £584 million, and underlying operating profit stood at £147.6 million, a rise of 39 percent.
Operating costs also increased with a 31 percent rise in sales and marketing costs. However, the corporate forecasted it will save £65 million from cost-saving synergies by next year, up from the £50 million it estimated from 2018.
Commenting in an announcement to the London Stock Exchange, Breon Corcoran, the manager Executive of Paddy Power Betfair, said: “Paddy Power Betfair has sustained good momentum through a period of substantial change. The restructuring is now largely complete, and the merger synergies are being delivered prior to schedule.
“We are making a world-class operation by exploiting the original assets and capabilities of every legacy business, particularly within the key functions of technology, marketing, and trading.”
“While our industry remains highly competitive and is exposed to the present economic and regulatory environments, our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth.”
Corcoran also revealed Paddy Power Betfair was wanting to buy one of the betting shops currently being made available by Gala Coral and Ladbrokes. Coral and Ladbrokes are themselves consolidating in a £2.3 billion merger, but competition regulators have demanded between350 and 400 shops owned by the 2 companies be sold to peer the deal completed.
However, Corcoran stated acquiring such betting shops isn't high up within the company’s priorities as a result of continued integration of Paddy Power and Betfair, but “if the best assets came up on the right price, then we’d be rather well positioned to do that.”
Lead image courtesy of androidslots.co.uk
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